RFE/RL NEWSLINE Vol 1, No. 81, Part I, 25 July 1997

This is Part I of Radio Free Europe/Radio Liberty's Newsline.
Part I is a compilation of news concerning Russia, Transcaucasia
and Central Asia. Part II, covering Central, Eastern, and
Southeastern Europe, is distributed simultaneously as a second
document. Back issues of RFE/RL NewsLine are available
through RFE/RL's WWW pages:
http://www.rferl.org/newsline/search/
Back issues of the OMRI Daily Digest are available through
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Headlines, Part I
* YELTSIN TO VETO LAND CODE
* RUSSIAN PRIME MINISTER UPBEAT ON ECONOMIC PROSPECTS
* CENTRAL ASIAN UNION CONFERENCE OPENS IN KYRGYZSTAN
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RUSSIA
YELTSIN TO VETO LAND CODE. President Boris Yeltsin says he will
veto the land code recently passed by the parliament because it bans
the purchase and sale of farmland, Russian media reported on 24
July. Arguing that rural dwellers should be given full land ownership
rights, Yeltsin remarked that "the whole world works this way. What
are we afraid of?" He also expressed regret that the Federation
Council, which rejected one version of the land code in June 1996,
approved the latest version passed by the State Duma (see "RFE/RL
Newsline," 12 June and 7 July 1997). The code now goes to a
conciliatory commission. Given that the Communist, Agrarian, and
Popular Power factions have a near majority in the Duma and
strongly oppose allowing the sale of farmland, it appears unlikely
that the current parliament will approve a land code that Yeltsin
would sign.
PATRIARCH DISAPPOINTED BY RELIGION LAW VETO. Patriarch of
Moscow and All Russia Aleksii II has issued a statement warning
that the presidential veto of the law on religious organizations could
lead to "tension between the authorities and the majority of the
people," RFE/RL's Moscow bureau reported on 24 July. Aleksii's
statement blamed the Russian and foreign media for misrepresenting
the terms of the law, "Kommersant-Daily" reported. Speaking in
Vilnius on 25 July, Patriarch Aleksii again argued that the law was
intended to block "pseudo-missionary" and "destructive" forces and
would not have "infringed on anybody's rights," ITAR-TASS reported.
Representatives of the Russian Buddhist and Muslim governing
bodies have also expressed regret about Yeltsin's veto, Interfax
reported. In a 25 July nationwide radio address, Yeltsin repeated
that he rejected the law because he believes many of its provisions
are unconstitutional and violate international treaties.
PRIME MINISTER UPBEAT ON ECONOMIC PROSPECTS... Viktor
Chernomyrdin on 24 July said the Russian economy is "on the point
of a breakthrough." Chairing a cabinet meeting, the prime minister
said "we can raise up the Russian economy and make it competitive
and respected throughout the world." He praised the government's
efforts to keep inflation low, reduce interest rates, and improve tax
collection. While only 58 percent of taxes were collected during the
first quarter of the year, he said, 87 percent of taxes were collected
during the second quarter, according to Interfax. Chernomyrdin also
claimed that over the past 12 months industrial output had risen by
2 percent. The State Statistics Committee recently announced that
industrial output grew by 0.8 percent during the first half of 1997,
compared with the same period in 1996, Interfax reported on 15
July.
...THREATENS QUOTAS ON EUROPEAN TEXTILES... During the same
government session, Chernomyrdin warned that Russia will impose
quotas on textiles imported from the EU if the union does not lift
import quotas on Russian textiles, Russian news agencies reported on
24 July. The EU currently imports Russian textiles worth some $140
million, while EU textile imports to Russia are estimated at $750
million. On 22 July, Russia renewed its bid to join the World Trade
Organization (WTO). But First Deputy Foreign Trade Minister Georgii
Gabuniya, representing Russia at the WTO talks in Geneva, told
Interfax the previous day that Russia will join the WTO only "on
absolutely equal terms," after the U.S. and EU lift anti-dumping
measures. In June, First Deputy Prime Minister Boris Nemtsov
refused to meet European Trade Commissioner Leon Brittan in
protest at anti-dumping measures against 14 categories of Russian
goods.
...CRITICIZES IMPLEMENTATION OF PRIVATIZATION, BANKRUPTCY
POLICY. Also on 24 July, Chernomyrdin criticized the government's
implementation of privatization and bankruptcy policy, ITAR-TASS
reported. The prime minister noted that nearly every time the State
Property Committee, chaired by Alfred Kokh, organizes a
privatization auction, there is a "scandal, with serious consequences."
He also said the Federal Bankruptcy Administration, headed by Petr
Mostovoi, is working "very sluggishly." First Deputy Prime Minister
Anatolii Chubais, considered the architect of Russia's privatization
program, is on vacation and did not attend the 24 July cabinet
meeting.
BACKGROUND TO CONTROVERSIAL PRIVATIZATION AUCTIONS. An
affiliate of the Alfa-group on 18 July was declared the winner of a 40
percent stake in the Tyumen Oil Company. Critics had charged that
the auction was rigged in favor of the Alfa-group. A Tyumen Oblast
arbitration court is to hear an appeal concerning the privatization of
the Tyumen Oil Company on 25 July. On the same day, a winner will
be announced in the auction for a 25 percent stake in the
telecommunications giant Svyazinvest. The starting price for that
auction was set at $1.18 billion, a figure critics say is far too low.
"Nezavisimaya gazeta" pointed out on 24 July that a 27 percent stake
in the Czech company SPT Telecom was sold in 1995 for $1.32 billion.
The upcoming sale of a 38 percent stake in Norilsk Nickel has also
provoked controversy (see "RFE/RL Newsline," 22 July 1997).
YELTSIN APPROVES TAX ON FOREIGN-CURRENCY PURCHASES. Yeltsin
has signed a law imposing a 0.5 percent tax on some foreign-
currency purchases, Russian news agencies reported on 24 July. The
tax will apply neither to cash withdrawals from foreign-currency
bank deposits nor to foreign-currency purchases from the Central
Bank by commercial banks. Revenues from the tax will be divided
60:40 between federal and regional budgets. On 23 July, Yeltsin
vetoed the law on procedures for establishing free economic zones on
Russian territory, ITAR-TASS reported (see "RFE/RL Newsline," 24
April 1997). The presidential press service did not explain on what
grounds the president rejected the law.
OFFICIALS ADMIT FLAWS IN DECREE ON INCOME, PROPERTY
DECLARATIONS... Deputy heads of the presidential administration
Yevgenii Savostyanov and Aleksandr Livshits admitted on 24 July
that Yeltsin's May decree requiring officials to submit income and
property declarations was flawed, RFE/RL's Moscow bureau reported.
Savostyanov noted that the decree envisions no procedure for
checking the accuracy of the declarations. By way of example, he said
the declaration submitted by Security Council Deputy Secretary Boris
Berezovskii warranted such an audit (see "RFE/RL Newsline," 24 July
1997). In addition, the May decree did not specify guidelines for
calculating the value of property. As a result, most declarations listed
not the market value of their property but the original purchase
price (for some items, such as land, the difference is substantial).
Savostyanov and Livshits said the administration is drafting another
presidential decree that will clear up those shortcomings.
...WHILE NAMING SOME WHO FAILED TO COMPLY WITH DECREE. At
the same 24 July press conference, Savostyanov listed some of the
prominent officials who failed to submit income and property
declarations, RFE/RL's Moscow bureau reported. They include Federal
Bankruptcy Administration head Petr Mostovoi, Atomic Energy
Minister Viktor Mikhailov, and former Kemerovo Oblast governor
Mikhail Kislyuk. Yeltsin appointed Kislyuk as director of the federal
agency for regulating natural transportation monopolies earlier this
month, shortly after appointing Aman Tuleev governor of Kemerovo.
Meanwhile, "Kommersant-Daily" reported on 25 July that in his
declaration, Livshits--who was finance minister from August 1996
until March 1997--listed total 1996 income of 56.1 million rubles
($9,685) and no bank accounts or securities.
FOREIGN MINISTER IN SOUTH KOREA. Yevgenii Primakov arrived in
Seoul on 24 July on the first leg of his southeastern Asian tour,
Russian media reported. Primakov met with his South Korean
counterpart, Yoo Choong-ha, and agreed to set up a hot-line between
Seoul and Moscow in case of conflict. He also met with South Korean
President Kim Young Sam and handed him a letter from Russian
President Boris Yeltsin in which Yeltsin wrote he wished to visit
South Korea. No date, however, has been set for that visit in view of
the South Korean presidential elections scheduled for December
1997. Primakov also took the opportunity to repeat Russia's offer to
mediate between North and South Korea. He noted that Russia has
good relations with both countries and that this is not the case with
some other parties involved in the Korean peninsula. On 26 July,
Primakov travels to Malaysia to attend the ASEAN conference.
U.S. SECRETARY OF ENERGY WRAPS UP VISIT TO RUSSIA. During his
visit to Russia from 20 to 23 July, Federico Pena added the Lytkarino
Instruments Research Institute to the list of those Russian nuclear
facilities participating in the Materials Protection, Control, and
Accounting Program, according to RFE/RL correspondents in Moscow
and Russian media. Pena said he was pleased with the progress of
the program, which monitors and safeguards nuclear material. Pena
also expressed satisfaction with the State Duma legislation on foreign
investment but said more legislation must be passed to attract
investors. He argued that Russia could attract as much as $600 billion
in investment under the right conditions. He also said it could mean
the creation of some 500,000 new jobs for Russian citizens.
CHECHNYA DEMANDS ROKHLIN'S EXTRADITION. The Chechen National
Security Service has addressed a letter to Russian State Duma
speaker Gennadii Seleznev and Procurator-General Yurii Skuratov
demanding the extradition to Grozny of Duma Defense Committee
chairman Lev Rokhlin, "Kommersant-Daily" reported on 24 July.
Chechen presidential adviser Ruslan Kutaev told the newspaper that
Rokhlin contrived to export from Chechnya quantities of an unnamed
valuable metal from L-39 aircraft that had been shot down and that
he sold the metal in Volgograd for one billion rubles ($173,000). The
procuracy confirmed that Rokhlin exported the metal, but it declined
to file charges on the grounds that he had used the proceeds to
purchase apartments for officers serving under him.
LUZHKOV UPDATE. Moscow Mayor Yurii Luzhkov says military
reform should be delayed until social problems in the armed forces
can be solved, Russian news agencies reported on 24 July. Noting that
soldiers face persistent wage arrears and long waiting lists for
apartments, the mayor said, "the reform should not be implemented
when the situation in the army is shaky, controversial, and
dangerous." Luzhkov said he saw "nothing tragic" in Yeltsin's veto of
the religion law, although he advocated passing a revised version to
protect "traditional confessions [from] various sects." The mayor also
expressed regret that "most [Russian] newspapers are not free"
because of pressure exerted by "politicized financial structures."
Luzhkov is considered to have considerable influence over many
Moscow-based newspapers, which pay far below market rates for
rent and municipal services. The Moscow city government recently
helped found the TV-Center network (see "RFE/RL Newsline," 22 May
and 9 June 1997).
TRANSCAUCASUS AND CENTRAL ASIA
CENTRAL ASIAN UNION CONFERENCE OPENS IN KYRGYZSTAN.
Presidents Nursultan Nazarbayev (Kazakhstan), Askar Akayev
(Kyrgyzstan), and Islam Karimov (Uzbekistan) are attending the
Central Asian Union conference in the Kyrgyz resort town of Cholpon-
Ata, which opened on 24 July. The three leaders agreed to a Kyrgyz
proposal to hold a conference in Bishkek under UN auspices to
discuss the situation in Afghanistan. All interested parties would be
represented at that meeting. At a press conference, they said they
had informed their respective prime ministers to draft a program for
setting up an international consortium to manage energy and water
resources before the next summit.
KARIMOV SAYS UZBEKISTAN CANNOT BE GUARANTOR OF TAJIK
PEACE. Uzbek President Karimov announced at the Central Asian
Union conference that he believes his country is in no position to act
as a guarantor of peace in Tajikistan, Russian media reported.
Karimov said the situation in Tajikistan is beginning to resemble that
of Afghanistan and that his country "is not prepared" to take on the
responsibility of ensuring peace in the neighboring country. He
added that only Russia, the U.S., or possibly the EU has the resources
to influence events in Tajikistan. are Seven countries, the UN, and the
Organization of the Islamic Conference are guarantors of the Tajik
peace process. Uzbekistan, however, did not sign the April Tehran
protocol as a guarantor country.
PROBLEMS IN SOUTHWESTERN TAJIKISTAN. Shirali Mirzoyev on 24
July announced the formation of the Defense Council of the Southern
and Central Regions of Tajikistan, RFE/RL correspondents and ITAR-
TASS. Mirzoyev is the head of the council and is supported by the
commander of the Tajik Army's First Brigade Colonel Mahmud
Khudaberdiyev. The council's stated goal is to establish order in the
Khatlon region and implement the terms of the Tajik National
Reconciliation Accord, signed in Moscow on 27 June. However, the
council is opposed to allowing fighters of the United Tajik Opposition
(UTO) to return to Tajikistan with their weapons. Under the terms of
the Moscow accord, some are to be allowed to return armed to
provide security for UTO leaders who also plan to return to the
country. Khudaberdiyev has already called for Dushanbe to be an
arms free zone. Khudaberdiyev also said he objected to allowing
"Islamic fundamentalists and Wahhabis" into Tajikistan.
DEMONSTRATION OVER UZBEK DECISION TO CUT WATER TO
KAZAKHSTAN. Residents of the Southern Kazakhstan Oblast on 24
July gathered on a bridge over a major canal near the Uzbek-Kazakh
border to protest Uzbek cuts in the water supply, ITAR-TASS
reported. Tashkent recently cut supplies to the Druzhba Canal, which
enters Kazakhstan from Uzbekistan, by 70 percent. The action now
threatens to ruin crops on more than 100,000 hectares of farmland
in Kazakhstan. Following negotiations, the Uzbeks decided to augment
the flow by 20 percent, but the Kazakhs claim this is insufficient.
GEORGIAN PRESIDENT DECREES FATE WORSE THAN DEATH. Eduard
Shevardnadze told a cabinet session on 24 July that he will shortly
sign a decree commuting the death sentences passed on 54 convicts
to 20 years' imprisonment, ITAR-TASS reported. Earlier this month,
52 Georgian convicts who had been sentenced to death staged a
hunger strike to protest "unbearable" prison conditions. There has
been a de facto moratorium on executions in Georgia since 1995.
Shevardnadze announced an official moratorium last December.
GEORGIAN INTELLIGENCE CHIEF OUTLINES REFORM PLANS.
Addressing senior police officials in Tbilisi on 24 July, acting National
Security Minister Dzhemal Gakhokidze announced the start of a
broad reform of the ministry to separate intelligence and counter-
intelligence, Interfax reported. Gakhokidze also said that a service for
combating terrorism and smuggling (including that of drugs) has
been created in response to reports that international drugs
syndicates are planning to increase clandestine narcotics shipments
to Western Europe via the southern Caucasus.
MUSEUM TO GEORGIAN WRITER DAMAGED BY BOMB. A bomb on 23
July partly destroyed the ancestral home of Prince Ivane Machabeli,
the 19th century writer and translator of Shakespeare, Interfax
reported. The building, located in South Ossetia, is now a museum.
The Georgian Interior Ministry refused to comment on the incident,
which observers in Tbilisi believe was politically motivated. In late
1990, Georgian parliamentary chairman Zviad Gamsakhurdia
revoked South Ossetia's autonomous status within Georgia, sparking
fierce fighting between the local Georgian and Ossetian populations.
An peacekeeping mission of the Organization for Security and
Cooperation in Europe has been deployed in South Ossetia since 1992.
Some progress has been made toward formalizing the region's status
vis-a-vis the central Georgian government.
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